Summary
TLDR: Bitcoin and Ethereum prices dropped over 2% after U.S. Bureau of Labor Statistics reported 0.4% increase in Consumer Price Index for March, keeping inflation at 3.5%. High inflation rates could lead to Fed keeping interest rates high, favoring traditional safe havens like treasury bonds over crypto assets. Federal Reserve Chairman Powell says no rush to raise rates, but also no rush to lower them. Unemployment rate remains relatively unchanged at 3.8%.
Key Points
1. Bitcoin and Ethereum sank lower, each dropping more than 2% immediately after the U.S. Bureau of Labor Statistics announced that the Consumer Price Index increased 0.4% in March, leading to high volatility in the crypto markets.
2. High inflation rates are bad news for crypto markets and stocks because it is unlikely that the U.S. Federal Reserve will lower federal interest rates, strengthening the case for traditional safe havens like treasury bonds over crypto assets.
3. Federal Reserve Chairman Jerome Powell recently stated that he’s confident the Fed won’t raise rates in the near term, but there’s also no rush to reduce rates. This uncertainty surrounding interest rates is causing fluctuations in the crypto market.